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Greetings SFA members,
We’re excited to present our inaugural Committee News communication for SFA members. This biweekly newsletter will highlight the work being conducted by SFA’s committees and task forces and let you know how to join these ongoing initiatives. As this is a new publication, we welcome feedback about how to make this newsletter most relevant to our members so that you can be engaged in the work SFA is undertaking on behalf of the securitization market.
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Other features of our Committee Newsletter include a “What We’re Reading” section to highlight work published by our member firms. We will be putting out a call for white papers, issue briefs, research notes, client memos, and anything else your firms are working on that we can help to amplify. As always, your expertise and willingness to participate in these initiatives is what makes SFA’s committees and task forces work, so thank you for all that you do. We look forward to continuing to grow with you in 2024 and beyond!
W. Scott Frame
Chief Economist and Head of Policy
| | Corporate Transparency Act | | |
Background: A subcommittee of our Legal Counsel Committee has been working to assess the various ways that FINCEN’s final CTA rule may impact securitization markets. Members of this subcommittee are currently drafting a set of FAQs that will be available soon. While this subcommittee was previously open only to Legal Counsel Committee Members, we are transitioning this work to a broader task force that is open to all SFA members.
What’s the goal? To establish guidelines for the securitization industry for compliance with FINCEN’s beneficial ownership criteria.
When do we meet? Currently ad-hoc; regular meetings will be scheduled soon.
Who should I contact? David Dwyer, Dallin Merrill
SFA’s Corporate Transparency Act Task Force is now open to all SFA members. Trustees, issuers, and broker-dealers may be especially interested.
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Background: SFA’s NAIC task force most recently submitted a response to the NAIC’s proposal that would allow it discretion in the filing exempt process. The final letter, submitted on January 26, asks the NAIC to narrow the scope of the application of SVO discretion, amend its discretion procedures to include insurance company investors in the rating review process, provide more specifics around the discretion process, and provide greater clarity about proposed review by “neutral third parties.”
What’s the goal? SFA’s NAIC Task Force serves as a standing committee to engage on any NAIC rulemakings that could impact securitization markets.
When do we meet? No calls are currently scheduled. Regular meetings will be scheduled soon.
Who should I contact? Frank Tallerico, Dallin Merrill
SFA’s NAIC Task Force is open to all SFA members. Insurance companies, asset managers, and rating agencies may be especially interested.
| | FHFA Alternative Credit Scoring Project Task Force | | |
Background: The FHFA’s Alternative Credit Score Project will have repercussions throughout the mortgage market. This task force is currently working to provide the FHFA with market feedback about their plans for updating GSE requirements for the upcoming adoption of alternative credit scores.
What’s the goal? Disseminate information from FHFA and the GSEs as they work through this transition and to serve as a forum to discuss operational challenges and provide feedback to them.
When do we meet? Ad hoc meetings based on project plans released by FHFA and the GSEs.
Who should I contact? Dallin Merrill, Jeanne Valk
SFA’s FHFA ACS Task Force is open to all SFA members. Agency MBS investors and mortgage analytics providers may be especially interested.
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Background: SFA’s Credit Risk Transfer (CRT) Committee works to educate and advocate about structured risk transfer transactions. The committee recently provided input on Michael Bright’s response to a recent Op-Ed on credit-linked notes (CLNs) and CRT by former FDIC chair Sheila Bair. A working group will soon begin work on advocacy materials to educate policymakers and their staff about the risk-mitigating benefits of credit risk transfer.
What’s the Goal? Education and advocacy surrounding risk transfer transactions, particularly in light of proposed Basel III regulations and changing market dynamics that may encourage different forms of risk-sharing arrangements.
When do we Meet? Ad hoc meetings; upcoming meetings will cover outreach to CFTC and Federal Reserve.
Who should I contact? Scott Frame, Frank Tallerico, Dallin Merrill
SFA’s CRT Committee is open to all SFA members who engage in synthetic risk transfer transactions, including CLNs, CRT, and insurance company risk-sharing transactions.
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Background: SFA’s final comment letter was submitted to the federal banking agencies on January 16. SFA’s letter focuses on dramatic proposed changes to the securitization framework as well as implications of these changes to the cost and availability of credit to U.S. households and businesses. With the comment letter submitted, SFA is now engaging in advocacy efforts on behalf of membership with policymakers and their staff.
What’s the Goal? Completing a response to banking regulators’ proposal to increase capital requirements for large banks.
When do we Meet? Weekly meetings concluded, response submitted.
Who should I contact? Scott Frame, Jeff Gudiel
SFA’s Basel III Task Force is open to all SFA members.
| | ATR QM Scope of Review Task Force | | |
Background: SFA’s ATR QM Scope of Review Task Force is working to create a uniform scope of review that third-party review (TPR) and due diligence firms can use when assessing ATR/QM compliance. This is similar to the work we have previously done with SFA’s TRID Grid. SFA is engaging with industry participants and regulators, and is convening an in-person task force meeting at SFVegas 2024.
What’s the goal? Creating a uniform scope of review for TPR firms to use when assessing ATR and QM compliance.
When do we Meet? Weekly
Who should I contact? Dallin Merrill, Jeanne Valk
SFA’s ATR QM Scope of Review Task Force is open to all SFA members. TPR firms, rating agencies, RMBS issuers and investors may be particularly interested.
| | RMBS Data Tape Task Force | | |
Background: SFA’s PLS Data Tape task force, has been convening weekly since March 2023 to update fields in the original ASF data tape. This task force is currently focusing on prime jumbo loans, with plans to expand in the future to cover different mortgage products. We are nearing the finish line of publication, as we wrap up our updated specifications.
What’s the goal? Updating the ASF data tape format for prime jumbo securities.
When do we meet? Weekly
Who should I contact? Dallin Merrill, Jeanne Valk
SFA’s RMBS Data Tape Task Force is open to all SFA members. TPR firms, issuers, rating agencies, investors, and other RMBS focused members may be especially interested.
| SEC Rule on Conflicts of Interest Task Force | | |
Background: SFA’s Rule on Conflicts of Interest task force focuses on the SEC’s final rule aimed at prohibiting certain conflicts of interest in securitizations, passed in November 2023. The SFA plans to keep the task force engaged to address open items as member firms work to implement their compliance programs.
What’s the goal? To address open items following the finalization of the SEC’s rule in November 2023.
When do we meet? Ad hoc meetings.
Who should I contact? Scott Frame, David Dwyer, Jeff Gudiel
SFA’s SEC Rule on Conflicts of Interest Task Force is open to all SFA members.
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S&P | Proposed Methodology for Determining Ratings-Based Inputs & Request for Comment
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Dentons | Corporate Transparency Act: Impact on Securitization Issuing Entities
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Alston & Bird | Financial Services & Products Advisory: Complying with the “Consider” Requirement Under the Revised Qualified Mortgage Rules
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Alston & Bird | California’s Climate Disclosure Requirements and Their Far-Reaching Effects
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